Union Pacific Corporation (UNP) Stock Valuation — PE Analysis
Railroads · NYSE
Current Price
$286.29
PE Ratio (TTM)
23.1x
Intrinsic Value
$364.17
+21.4% margin of safety
COMPETITIVE MOAT
↑Extensive Rail Network Infrastructure
Union Pacific operates a vast, irreplaceable rail network across the Western U.S. This physical infrastructure creates significant barriers to entry for new competitors.
↑High Switching Costs for Customers
Shippers face substantial costs and logistical challenges to move their freight from rail to other transportation modes. This locks in existing customer relationships.
↑Economies of Scale in Operations
The sheer volume of freight handled allows Union Pacific to achieve significant cost efficiencies per ton-mile. This scale advantage is difficult for smaller players to replicate.
INVESTMENT RISKS
↓Potential for Significant Fines and Legal Damages
The class-action lawsuit regarding chemical dumping could result in substantial financial liabilities and ongoing legal costs, impacting profitability.
↓Operational Disruptions and Safety Incidents
The nature of rail operations carries inherent risks of accidents and disruptions, which can lead to service interruptions and reputational damage.
↓Economic Downturns Affecting Freight Volumes
Union Pacific's revenue is directly tied to industrial production and consumer demand. A significant economic slowdown would reduce freight volumes and negatively impact earnings.
Base case
UNP base case PE valuation
At a current price of $286.29, the base case PE valuation puts UNP fair value near $364.17 per share. That figure assumes 11.2% yearly earnings growth, a target PE multiple of 23x, and a 10% discount rate.
Intrinsic Value
$364.17
Margin of safety
+21.4%
Expected annual return
+4.9%
Base case assumptions: 11.2% annual earnings growth, 23x target PE, 10% discount rate, 5 year projection. Data as of 2026-07-30.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the UNP PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Union Pacific Corporation respond.
Open PE Calculator for UNPCompany Overview
Union Pacific Corporation, a prominent American railway enterprise, conducts its primary operations through its subsidiary, Union Pacific Railroad Company. The company provides extensive freight transportation services for a wide array of commodities. Its diverse cargo includes agricultural products like grain, fertilizers, and refrigerated foods; energy resources such as coal, renewables, petroleum, and liquid petroleum gases; and industrial materials encompassing construction products, chemicals, plastics, forest products, metals, ores, soda ash, and sand. Union Pacific also facilitates the movement of finished automobiles, automotive parts, and general merchandise in intermodal containers, serving a varied clientele that spans agricultural processors, energy producers, and industrial manufacturers. As of December 31, 2021, the company's vast rail network stretched 32,452 route miles, strategically connecting major ports along the Pacific and Gulf Coasts with crucial gateways throughout the Midwestern and Eastern United States. Established in 1862, Union Pacific Corporation is headquartered in Omaha, Nebraska.
Financial Metrics — UNP PE Stock Valuation Data
PE Ratio (TTM)
23.1x
PEG Ratio
3.22
Earnings Yield
4.31%
ROE (TTM)
38.6%
Revenue/Share (TTM)
$42.82
Dividend Yield
1.93%
Debt/Equity
1.51x
Frequently Asked Questions
What is the PE ratio of UNP?
The trailing twelve-month PE ratio of UNP reflects how much investors pay per dollar of Union Pacific Corporation's earnings. This metric is most useful when compared to Railroads peers and the company's own historical range.
Is UNP overvalued based on PE ratio?
UNP's PE of 23.1x combined with a PEG ratio of 3.22 provides a growth-adjusted perspective. A PEG above 2.0 means the P/E is high relative to the earnings growth rate. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Railroads, a DCF analysis may be more appropriate.
How do I value UNP stock using PE ratio?
To value Union Pacific Corporation using PE: (1) Compare the current PE (23.1x) against the Railroads median to assess relative pricing, (2) check the PEG ratio (3.22) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of UNP?
UNP's PEG ratio is 3.22, calculated by dividing the PE ratio (23.1x) by the expected earnings growth rate. A PEG above 2.0 means the P/E is high relative to the expected earnings growth rate. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for UNP stock valuation?
PE ratio gives a quick relative read — how UNP is priced versus Railroads peers. DCF provides an absolute value based on projected free cash flows. For UNP, with a strong ROE of 38.6%, both methods are worth using — PE for a market-relative check, DCF to stress-test whether fundamentals justify the price. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See UNP DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Industrials valuationsP/E and DCF value UNP with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-07-30. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.